Leland Strom

Leland Strom is chairman and CEO of the Farm Credit Administration, the independent regulatory agency that examines Farm Credit System institutions to ensure sound lending practices for farmers and ranchers. Strom and his family, of Kane County, Ill., were instrumental in making a place for farmland preservation in the state of Illinois, and were first to preserve their farms in that county’s purchase of development rights (PDR) program – the only such program in the state. We spoke with Strom Jan. 13, 2010, about his preservation experience and about the role FCA plays in the future of urban edge agriculture.

FPR: Thank you for agreeing to do this interview – can I call you Lee?

STROM: Please do.

FPR: OK. I know you’re chairman of the board and CEO of the Farm Credit Administration – that’s a bigger job than I can imagine, Lee, but what really caught my attention when I learned about you, was, you and your family placed your farm under a conservation easement in Kane County.

STROM: Yes, we did. We accomplished that in 2002, so, eight years ago.

FPR: Now, is that your family farm?

STROM: Yes, actually I’m the third generation of Swedish immigrants to that area of Kane County, Illinois, commonly known as the Fox River Valley, which lies in the far western suburbs of Chicago, though it seems closer than it used to be because so much development has occurred out in our area of Kane County in the last 20 years. Our own farm lies about 43 miles straight west of downtown Chicago.

FPR: That’s incredible… were you involved at all in creating the Kane County program?

STROM: Yes, I was. Prior to this program, Kane County’s method of preserving open space was largely accomplished through purchase of tracts of land through the Kane County Forest Preserve. The county would buy the property outright and that land was turned into prairie or reforested. Most of that ground was removed from agricultural production. The county acquired thousands of acres – 3,000 to 5,000 acres or more of forest preserve property, so [farmland preservation and easement purchase] was actually a new method of how to preserve farmland in the county, where the opportunity to develop is extinquished.

FPR: Right. Tell me about the farm operation.

STROM: Well, actually the whole farm where my grandfather purchased – in 1915, so 95 years ago – the first tract of land for the farm in west central Kane County – was a small dairy operation. When I was a young boy my dad still had the cows, but the cows left the farm in the early 1960s. And when I got out of my schooling I began farming full time and farmed this along with some other neighboring properties, which I rented. We did purchase some additional tracts of land. The farm my wife and I live on, [we] also decided to put into the program, so we actually have two farms in the program.

FPR: Oh, very good… I’m wondering– how did putting your farm into the preservation program affect your family?

STROM: Well, I think our family – and maybe we are a little unique in our interest and background – our father, in my mind, was a visionary – he worked on and off the farm in his lifetime. He had a strong appreciation for the open space value of agricultural land, the value of conservation. He actually dedicated a 40-acre tract of the home farm when I was in grade school, into a kind of wildlife preservation area. He had a pond dug and planted a lot of trees and made it an area where our family has enjoyed many hours and days over the last 50 years in this conservation area. My dad also served for a short period before his passing in the 1980’s on the county board. He was very outspoken about the future of Kane County as it continued to see population growth and development coming forward. He was a very strong spokesman and advocate for preserving areas of agricultural use in the county. As I was raised, I saw leapfrog development, but during the 1970’s and 80’s, Kane County did develop better planning resources that focused on farmland development. There was a requirement that if you wanted to build a residence in a rural area, you had to have at least a 40-acre tract of land. The county has approached it on many fronts. Because of my interest in these things, too, I got involved in the development stages of the ag land preservation easement program, and actually our home farm was the first property enrolled in the program.

FPR: Oh, is that right? Well, congratulations. Then you know what it’s like to step up and be first in something like that.

STROM: Very much so.

FPR: That’s a major change for a locality.

STROM: I think our family was honored to participate in a new type of program like this, but it also gave us an opportunity to honor our father and grandparents’ legacy, and that through their vision and outspoken nature in trying to protect agriculture we were able to foster this program.

FPR: Well let me ask you this, did putting the farm in preservation change the farm operation itself?

STROM: No, it basically is maintained as it was prior – still growing corn and soybeans..occasionally we raise wheat and hay.

FPR: That shows your family intended to stay in farming to begin with then…

STROM: We take satisfaction in knowing that 50 or 100 years from now it’s still going to be a piece of open agricultural land. The county will deploy the appropriate resources to help assure that. This agricultural easement does come with an agreement between the landowner and the county – it establishes basic ground rules – it does put some limitations on the amount of livestock that can be raised on the farm, but as we worked with them we came to what we felt was very satisfactory – they’re not too stringent to really cause an economic hardship to a producer…

FPR: Let’s talk about borrowing, since that’s the business you’re in for the moment. Should a farm operation be concerned about their borrowing potential?

STROM: Are you talking about credit conditions as we see them?

FPR: Yes.

STROM: Well, as you mentioned, in my role as chairman and CEO of the Farm Credit
Administration, — here in D.C., with my home in Illinois, (and I like to get back to the farm as often as I can) — but I serve with two colleagues on this regulatory agency – and again, we are the safety and soundness regulators of the Farm Credit System, which is the largest provider of credit and agricultural lending services to farmers and ranchers across the country. It provides almost $170 billion dollars in loans, so it is a major player in that. And in this, our country’s most serious banking crisis over the last 18 months, since the Great Depression, I’m happy to report that at this point, the Farm Credit System has been serving the needs of credit for farmers and ranchers even in light of these other issues swirling around us.

The agricultural sector is fortunate that it has had several years of fairly good opportunities for farmers to get good returns on their efforts and the agricultural sector is fairly well capitalized at this point. But I realize there are significant stresses going on in various areas including the pork industry, poultry, dairy, the livestock industry in general, and the ethanol industry – significant points of stress. And we continue to monitor that, work in our oversight of the system institutions to make sure they are appropriately providing sound and constructive credit to the agricultural needs. And again, I’m happy to report we are accomplishing our task at this point.

FPR: I’m glad to hear that… I have just one more question – and I’m afraid I’ve kept you a little longer than I said…

STROM: No, that’s fine, I enjoy these kinds of breaks…

FPR: Great… then, in farmland preservation we’re most concerned about farms in urbanizing areas, like where you are in Kane County. Do you see a role for Farm Credit in serving those areas in particular?

STROM: Well, yes I do, and you raise an interesting point and something I’ve been contemplating lately. It gets to the area of the changing face of agriculture. I come from a bulk commodity background, of what is traditionally Midwest – corn and soybean production, I mean, you could drive from the eastern edge of Ohio to the western edge of Nebraska and rarely, if ever, be out of sight of a corn or soybean field in the summertime. That’s the mass commodity production.

But in and around areas of high density population, there are tremendous marketing and local food growing opportunities. And there’s been this recent emphasis on this and I think it is incumbent upon any reasonable individual in the agricultural industry to recognize these new challenges and opportunities that exist. And I think Farm Credit plays a particularly important role, since it is charged by Congress through the Farm Credit Act to provide agricultural credit to eligible borrowers regardless of what they are producing …
I hope Farm Credit adjusts to the changing face of agriculture and what opportunities are out there, whether it be a small producer growing seasonal vegetables, or [nursery], niche livestock, or equine production. There is a whole host of new dynamics, focusing on the local aspects.

I’m learning more everyday, and the reason I’ve been thinking about it the last few days is, my youngest son got his degree a year and half ago from Iowa State University in agricultural business and international studies. Rather than come back and enter the traditional agricultural segment of production or go to work for agri-business, he challenged himself, and he also challenged me as a father – he said ‘Dad, I need to learn more about how the world thinks about issues around agriculture, environment, and sustainability.’ So he applied and got accepted in a program in Scandinavia, actually my home country of Sweden- so he is for two years spending his master’s degree work with 35 students from 27 different countries – all with the same goal. Now he’s coming back to do his thesis work here in D.C.

But he is, in my mind, the face of tomorrow’s thinking and tomorrow’s generation, encompassing all these aspects together. As I  remind him frequently, when I was his age I was fulltime farming, and if I got 10 miles from home that was a real trip for me… [laughter]. At the age of 23 he’s spent time in 15 different countries – but that’s where the future lies – understanding issues both locally and globally.